Treasury Cabinet Secretary John Mbadi has acknowledged the difficulty of the treasury job, citing several key challenges.
In an interview on Wednesday, November 27, Mbadi stated that the Kenya Kwanza government was overambitious when it came into office by thinking that they could retire all the pending bills in a go or within a short time. He affirmed that it was not practical, and it is still not.
“I think the president was apparent when he appointed me. It has been three months, and I have no complaints or regrets. The job is tough because there are a lot of issues to deal with,” Mbadi said in a statement.
Further, he added, “Fiscal management of public finance is a major challenge to us as a country. It all revolves around how we use the taxpayer’s money. Several things need to be done; how do we budget, every line item must be explained and justified, and costing must be done so that we standardize it.”
Notably, he indicated the country is still paying pending bills today. He further explained that the recent bills, which are not subject to verification, are being paid as required.
Additionally, the verified bills are also being settled, with payments already beginning. In affirmation, he said that the process is kicking off immediately. However, he hinted at the lack of enough resources to retire all of them at the moment.
Also Read: Breakdown of Tax Changes Proposed by Mbadi & How They Will Affect Your Net Salary
Mbadi Highlights the Greatest Challenge
The greatest challenge we have now is with the middle class in terms of economic power to buy goods and services.
Moreover, he noted that the biggest issue the country must address is that of liquidity of the economy among the middle class most of which are employed Kenyans who are finding it hard because of tax levies and measures which were introduced last year 2023 coming to 2024.
The former ODM Chairman reiterated that those tax levies have reduced the purchasing power thus a way of relief should be sought.
He clarified that liquidity challenges arise due to the failure of the government to pay pending bills.
At the same time, he warned that non-compliance on tax payments is criminal. “If we allowed people not to comply, would you even collect taxes? Few Kenyans are paying taxes, yet we are so many because some people are not complying,” Mbadi explained.
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Also Read: Mbadi’s Ministry in the Spot Over Ksh161 Billion Unexplained Payments
The CS’s Solution
To address the challenge, Mbadi emphasized that effectively managing government affairs requires collaboration, not just individual effort, but a clear understanding of what is happening within the government.
“He is the one who was voted for by the people of Kenya, he must understand what is happening otherwise he will be accused of negligence,” Mbadi stated while referring to President William Ruto.
Further, he questioned, “How would you take it when the president wakes up one day, something happens, and he says he doesn’t know? What is important is whether he listens and he does listen.”
On the other hand, he remarked that the calculation of inflation is based on the adjustment in the cost of basic commodities. In Kenya, what drives inflation is largely food and energy.
He emphasized that Kenya needs to have a fiscal program within which it will operate citing that the country is not going to borrow more than Ksh.413 billion in this financial year.
Consequently, he agreed that the multi-year budgeting is not properly done to know how many projects we should start and when they should end. “The planning process has been faulty. How do we onboard projects to the budget? And that is one of the things I am working on to make sure that we link planning to budgeting,” Mbadi asserted.
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